Vietnamese garment and textile exports plunged by 18.63% to US$8,701 billion during the first three months of the year, compared to the same period in the previous year, due to the impact of global inflation. The fall was the deepest in the first quarter since 2009.

Global inflation forced consumers to tighten spending on non-essential products, which led to a sharp drop in exports to major markets such as the US and EU. The shortage of export orders since Q4 2022 has led to a sharp drop in export turnover, factories operating at below capacity and reduced working hours for employees.

Many forecasts predict that the domestic industry's export growth will slump this year.

The textile and garment industry will face challenges such as the trend of increased layoffs and businesses moving the workforce away from big cities in 2023, according to the Vietnam Textile and Apparel Association.

In this context, textile and garment enterprises have to implement many solutions such as restructuring enterprises, markets and products to maintain production and keep workers while waiting for the market to warm up.

The most significant solution is to diversify markets, products and brands produced in Vietnam.

Vietnam has become Australia's largest export market for raw cotton, with imports of the commodity from Australia rising 899% to $555m between 2020 and 2021.

The relationship between China and Australia has been strained since 2020, with China imposing tariffs on Australian goods in response to Australia's call for an investigation into the origins of the coronavirus.

Vietnam has other advantages that Australian cotton producers are able to exploit, including free trade agreements, a convenient location and high demand from apparel manufacturers. Vietnam and Australia are members of three key free trade agreements, including the ASEAN-Australia-New Zealand FTA, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership.

These FTAs have opened up supply chains for Vietnam's manufacturers, while also giving Australian cotton preferential import tax status. Vietnam is expected to export $46bn-$47bn of clothing and apparel in 2023, which has boosted demand for cotton imports.

The US import of readymade garments from the world fell by 11.86% to $13.21 billion in the first two months of 2023, compared with $14.99 billion during the same period in 2022, data indicating that readymade garment imports to the US market have experienced a decline, as per The US Department of Commerce's Office of Textiles and Apparel.

The overall demand for apparel items decreased due to an economic slowdown caused by the Russia-Ukraine war. This decline has been compounded by high inflation and interest rates, which has resulted in consumers cutting back on spending. As a result, imports are expected to grow slowly over the next few months.

China and Vietnam held the first and second highest positions in the US import market, with 21.08% and 18.31% shares respectively. However, China's import of apparel to the US decreased by 29.65%, and Vietnam's RMG import fell by 10.62% in the same period.

Meanwhile, The US imported 453.81 million square metres of apparel from Bangladesh in January-February 2023, a 14.41% decrease from 530.20 million square metres during the same period in 2022. Indonesia's apparel import declined by 7.06%, and Cambodia's import fell by 29.05% in the same period.

However, India's RMG export to the US market grew by 0.41%.

Fast Retailing Co. is a Japanese company that operates several popular retail brands, including Uniqlo, GU, Theory, and J Brand. Uniqlo is the company's most well-known brand, known for its high-quality, affordable clothing, and has become a global phenomenon, with stores in over 25 countries.

China is an important market for Fast Retailing, as it accounts for about 40% of the company's total revenue. The company has been expanding rapidly in the country, with plans to open 100 new Uniqlo stores every year. The firm has almost 900 Uniqlo stores in the country, making it a bellwether for global retailers in the world's second-largest economy.

Fast Retailing is set to release its second-quarter results this week; it had earlier reported a 2% decline in operating profit in Q1, partly due to the residual impact of COVID-19 restrictions in China. Fast Retailing's Q2 operating profit is expected to rise 30% to ¥91bn ($682m), with analysts anticipating full-year profit to reach ¥347bn, up 17% from last year's record earnings.

The lifting of pandemic restrictions in China is expected to boost demand and improve the company's financial performance. In addition to China, Fast Retailing has a significant presence in other markets, including the United States, Europe, and Southeast Asia.

The company has also been focusing on expanding its e-commerce capabilities, as more consumers shift to online shopping.

Bangladesh's export-based apparel makers have struggled with declining profits due to rising production costs despite the depreciation of the local currency against the US dollar.

Energy costs, labor expenses, and raw materials are major ingredients for manufacturers, and their prices have increased in Bangladesh. The country's energy costs have surpassed those of many other countries, including India, due to the government's hike in the prices of diesel, kerosene, petrol, and octane. Transportation costs also increased with the rise in fuel prices, which offset the benefits of the currency depreciation.

Although the currency depreciation increased competitiveness for exporters, those whose raw materials needed to be imported and whose domestic value addition was low experienced relatively lower benefits.

However, Bangladesh's export earnings have remained strong due to the shifting of orders from China, and the country has established itself as a reliable supplier in the global market.

Indians are the most eco-conscious dressers compared to respondents from other countries, followed by China as per recent survey by Statista Consumer Insights.

In the survey, 89 percent of Indian participants claimed to buy sustainable and eco-friendly fashion, such as clothes made from sustainable fabrics, fair trade goods, or products with lower CO2 emissions than regularly produced items. The second-most eco-conscious group was the Chinese, with 69 percent of respondents buying sustainable clothing, accessories, or shoes.

In contrast, only 49 and 41 percent of participants from Western countries like the United States and Germany, respectively, claimed to buy eco-friendly clothes and similar items.

Interestingly, 45 percent of the Indian residents surveyed were willing to pay a much higher premium for fashion produced fairly. The most important criteria for sustainable fashion purchases in India were quality, price, and comfort. Additionally, only 47 percent of Indians based their purchasing decision on the brand or manufacturer.

This survey highlights the growing trend of sustainability in the fashion industry and how Indian consumers are leading the way in adopting sustainable practices.

It also underscores the need for fashion brands to prioritize sustainability and eco-friendliness in their products to cater to the evolving preferences of consumers worldwide.

Cambodia's international trade has decreased by 14.5% to $11.3 billion in the first quarter of 2023, according to a report by the General Department of Customs and Excise.

Cambodia's exports decreased by 5.7% to $5.4 billion during the same period, while imports decreased by 21.3% to $5.8 billion, resulting in a trade deficit of $468 million. The US remained the biggest market for Cambodia's products, importing $1.8 billion worth of products, while China became the Kingdom's biggest trade partner with bilateral trade reaching $2.8 billion.

The decrease in exports was mainly attributed to the economic slowdown in the European Union and the US, which are the two largest markets for Cambodia-made products. The garment, footwear, and travel goods industry, is the largest foreign exchange earner for Cambodia.

Global economic situation not being good, and the slowdown in economic growth in the EU and US caused by the war in Ukraine has affected the purchase orders of products from Cambodia.

The situation has seen a decline in orders from outside, especially clothes and footwear.

The Indian cotton market is strong pricewise; despite fears over slow textile consumption had caused a panic, however, the reasons for this upward trend in prices are varied.

The cumulative arrivals of Indian cotton are far lower than previous years, with a large gap between current arrivals and the production forecast. This has resulted in a decrease in the supply of cotton and has therefore supported local cotton prices.

Also, there has been a growing demand for cotton from the downstream market. Buyers in the downstream industry have been active, leading to an increase in cotton yarn transactions and prices. This is due to local spinning mills operating at a high level, with lower inventory than in previous years.

Additionally, orders from China, Turkey, and Europe have increased the consumption of cotton. The government's policies to support downstream capacity expansion have also increased confidence in the textile industry.

With low supply and high demand expectations, Indian cotton prices are on an upward trend. If the subsequent reduction in Indian cotton arrivals intensifies domestic cotton supply and demand contradictions, it is possible that the government may remove the cotton import duty, which could support global cotton prices.

The problem of Organized Retail Crime (ORC) of professional shoplifting and other thefts has been plaguing global retail sector for a long time, with thieves on the lookout for easy money. In fact, to curb this phenomenon, many offline retailers are putting their valuable items under lock and key behind showcases to ensure the products stay safe and are only taken out for genuine buyers. Many others are using off-duty police officers and plainclothes security although this is turning off shoppers with overreaching measures as it limits browsing.

NRRS highlights a growing problem

ORC is one of the biggest issues facing the global retail industry today with losses amounting to almost $100 billion, say analysts. It usually involves a group of thieves -- and not just shoplifters -- who are part of a wider criminal network, conspiring in a game plan to steal and resell retail merchandise for financial gain, leading to major retail shrinkage and inventory loss. In the US, the National Retail Security Survey (NRSS) of 2022, published by the Washington-based National Retail Federation (NRF) cited nearly $100 billion in losses for general retail industry. It also highlighted how retail theft creates violence in retail environments, creating safety risks for retail workers and customers.

In the US, customers of color who already feel overpoliced, are feeling even more alienated with stepped-up security measures against shoplifting. Mega retail giants such as CVS, Sephora, and Walmart had made changes in the aftermath of George Floyd's murder in 2020 when they promised to avoid racially biased practices like locking up products only for black customers. The ORC issue has got more attention in post-pandemic years, as organized high-profile smash-and-grab retail thefts and flash mob robberies are increasing in a fluctuating economy.

Increasing ORC in the apparel segment

The NRF, one of the world’s largest trade association in a recent security survey of around 60 global retailers found inventory loss -- also known as shrink – was high at an average rate of 1.4 per cent in 2022, adding up to $94.5 billion in losses. The greater shrink proportion of 37 per cent, was from external theft that included stealing a variety of expensive products during well-planned ORC incidents and most retailers saw a 26.5 per cent uptick in organized theft incidents last year.

This report found almost 97 per cent retailers had been ORC victims in the past year and 68 per cent had seen an increase in this activity. Almost two-thirds or 65 per cent retailers said ORC is a higher priority for their companies compared to five years ago, while 56 per cent were allocating additional technology resources to resolve the issue; 44 per cent were forced to increase their loss prevention budgets. In an attempt to fight ORC, 38 per cent had changed or were planning to change return policies and 37 per cent were doing the same with point-of-sale policies as many items are returned after stealing, while 27 per cent are doing strict employee screening cross-checking with the government records and another 24 per cent being strict with trespassing.

Dealing with retail theft

Deloitte’s 2023 retail industry outlook says, over the next decade, consumer socio-demographic shifts will happen at greater speed which will create higher spending needs with changing customer trends and the consumer getting older and obese and yet fashion-conscious, multi-ethnic varieties, more stress on gender-positive and sex-positive clothes and a younger population that is more digitally reliant and less financially secure.

At the same time, retail theft is posing to be a big problem. However, simply locking up high-priced items reduces browsing which can affect sales by around 15 to 25 per cent. And this is not at all conducive in a slow post-Covid market.

However, online shopping can curtail this with customers wanting the best price in the most convenient way possible. Many apparel retailers are now offering services, including same-day delivery and curb side pickup, to guarantee excellent customer experience in the offline mode. As the global economy struggles to find its feet, desperate measures to stop ORC by desperados getting braver every day is the need of the hour in the retail segment.

Kenya's textile industry is set to face a severe blow after a proposal by the East African Sectoral Council to move tax paid on imported apparel to the highest band under the Common External Tariff (CET) in a bid to boost local production.

The council, which is responsible for investment and trade in the region, aims to promote cotton production within the region and reduce reliance on imports that have hindered the growth of the industry.

Currently, Kenya produces less than 12 million square metres of woven fabric per year, while the market demand stands at approximately 171 million square metres, making it a net importer of both cotton and textiles. The council's proposal would raise the duty levied on textiles under CET to 35 percent, the highest tax band under the East African Community.

The council's recommendation came during its 38th extraordinary meeting in Tanzania, where it also called for the expansion of harmonised cotton, textiles, and apparel articles under duty remission to enhance trade among member states.

The council urged member states to establish a digital platform to facilitate the exchange of information on cotton harvesting and trade to boost intra-regional trade on the products.